Why 664,000 Aussies Switched Their Home Loan in FY26
New analysis reveals $371 billion changed hands as Australians left their lenders in record numbers — and most weren't just chasing a better rate.
The Scale of Australia's Home Loan Switching Surge
If you've been thinking about refinancing, you're in very good company. New analysis from Australian financial-services technology company Elula has put hard numbers on something mortgage brokers have been noticing for a while: Australian borrowers are leaving their banks in record numbers.
In the year to 30 June 2026, more than $371 billion in home-loan balances moved between lenders — whether through refinancing or property sales. Around 664,000 customers switched lenders over the financial year, which works out to more than 1,800 borrowers every single day, and an average of more than $1 billion in mortgage balances on the move each day.
The pace is also accelerating. Home-loan churn increased by more than $41 billion in FY2026, representing a 13 per cent rise on FY2025, while the number of customers leaving their lender also grew by about 48,000. The number of borrowers moving an existing mortgage to another lender — rather than closing their loan after selling a property — rose 9 per cent from the previous financial year. By contrast, the number of customers exiting their bank after selling a property fell 3.1 per cent in the June quarter compared with a year earlier. In other words, more Australians are keeping their homes and simply choosing a different lender.
The analysis also found that about 1.3 borrowers with mortgages exceeding $700,000 were changing lenders every minute — a signal of particularly intense competition at the higher-value end of the market.
If you want to understand where you stand, the refinance savings calculator is a useful starting point, and comparing current refinance options can give you a clear picture of what's available.
Why Borrowers Are Really Leaving — It's Not Just the Rate
Here's the finding that may surprise you. Elula CEO Josh Shipman told The Adviser that the dominant reason customers are switching is not a lower interest rate — it's everything else about the customer relationship.
The Adviser reports that Shipman described 65 per cent of churning customers leaving for non-price reasons. Service quality, unresolved complaints, and product fit are the main factors driving departures. Only 35 per cent of customers who switch are primarily motivated by price.
"The big myth is that customers leave for a better rate – that's not accurate," Shipman said. "Of course, some customers leave because they're price sensitive but that represents only 35 per cent of churning customers. In fact, 65 per cent of customers leave for other reasons; service, unresolved complaints, product fit, customer experience – these are the main points lenders should focus on."
Shipman also pointed to a structural problem on the lender side. Most banks only discover a customer is at churn risk when they receive a formal request to discharge the loan — which is the final step of a refinancing process that may have been underway for months.
"Most lenders only learn a customer is a churn risk when they receive a request to discharge their loan, which is far too late. Majority of lenders are reactive and have very basic and quite dated modelling," he said.
He described the critical failure as banks missing the moment when a customer's lending needs begin to change. By the time the bank becomes aware, the borrower has often already spoken to a broker and arranged their next loan.
What This Means If You're Considering Refinancing
For borrowers, there's a practical lesson embedded in this data. If the bank that holds your mortgage isn't proactively reaching out to discuss your situation — especially as fixed-rate terms end, your income changes, or your equity grows — you are likely already among the customers whose needs aren't being actively managed.
Shipman noted that lenders with churn rates above the system growth rate of around 7 per cent are, in effect, losing more business than they're gaining. "Growth isn't an accident – it's a discipline. If your annualised churn rate is over 7 per cent, it's already too high," he said.
For borrowers, the implication is clear: if your lender isn't having that conversation with you, someone else will. That's exactly why speaking to an independent mortgage broker remains one of the most effective ways to understand whether the loan you're on today still fits your circumstances.
The surge in switching also reflects a broader reality: lenders are competing hard to win and retain customers right now. That competition translates to genuine options for borrowers who take the time to review their situation. You can check your borrowing power to understand what you might qualify for under current lending conditions, and then explore the current refinance market to see how competitive the landscape actually is.
Elula's full analysis as reported by The Adviser makes one thing clear: record numbers of Australians are acting on their options. The question for every borrower sitting on the same loan they had two or three years ago is whether their current deal still makes sense — or whether they're simply providing loyalty to a lender that isn't providing the same in return.